(Applicant's Abstract) Surfactant protein C (SP-C) is an extraordinarily hydrophobic peptide of 35 amino acids (Mr=3.5k) which facilitates rapid adsorption and spreading of surfactant phospholipids at an air-liquid interface. SP-C is synthesized in alveolar Type II epithelial cells as a 197 amino acid proprotein which is processed to the mature peptide by proteolytic cleavage of an NH2-terminal propeptide (residues 1-23) and a COOH-terminal peptide (residues 59-197). In human infants mutations leading to deletion of exon 4 in the COOH-terminal peptide or mutation of a single proline residue in the mature peptide are associated with development of interstitial lung disease (ILD). Although lung structure and function is not altered in SP-C (-/-) mice, the results of preliminary studies indicate that lung development is profoundly disrupted in transgenic mice expressing an SP-C transgene in which the NH2- and COOH-terminal peptides were deleted. This proposal will test the central hypothesis that alterations in SP-C proprotein or mature peptide structure lead to lung disease by disruption of lung structure via toxic effects related to aggregation and retention of SP-C in the early secretory pathway, or directly inhibiting surfactant function in the airspace. The specific aims of this proposal will determine if (1) specific mutations in the SP-C gene cause ILD in transgenic mice, (2) abnormal SP-C protein interacts with wildtype SP-C protein to promote lung disease, (3) specific mutations lead to aggregation and retention of SP-C in the early secretory pathway, and (4) secretion of abnormal SP-C protein contributes to lung dysfunction by inhibiting alveolar pulmonary surfactant.